Tvl.Sivapreetha Traders vs. The State Tax Officer

Facts

The petitioner, Tvl.Sivapreetha Traders, represented by its Proprietor A.Sivakumar, filed a writ petition challenging an order dated 28.12.2023 passed by the respondent, The State Tax Officer, Thanjavur -1 Assessment Circle. This order, uploaded on the GST portal on 31.12.2023 in Form GST DRC 07, confirmed a demand for the assessment year 2017-18. The petitioner claimed they were unaware of the preceding notices and the impugned order because they were posted on the GST common portal and the proprietor was hospitalized. The respondent had already recovered Rs.41,475/- from the petitioner's account and further amounts from their Electronic Credit Ledger, which the petitioner argued was beyond the respondent's power, as they could only block the account. The writ petition was filed on 06.06.2024.

Held

The Court quashed the impugned order dated 28.12.2023. The reasoning was based on considering the submissions of both parties, the fact that the amount of tax involved was Rs.1,31,998/-, and that a sum of Rs.41,475/- had already been recovered from the petitioner. The Court granted liberty to the petitioner to make a fresh representation before the respondent within 30 days from the date of receipt of a copy of the order. The quashed order was to be treated as an addendum to the show cause notice. The respondent was directed to pass a fresh order on merits and in accordance with law, preferably within three months, after affording an opportunity to the petitioner to be heard. The ratio decidendi is that despite the availability of alternative remedies and potential delay, a High Court may interfere in writ jurisdiction if there is a procedural irregularity leading to a lack of opportunity, especially when a substantial amount has been recovered and the tax involved is not excessively large.

Key Issues

1. Whether the impugned order dated 28.12.2023, passed by the respondent, is liable to be quashed on the grounds that the petitioner was not afforded a proper opportunity to file objections and produce documents due to lack of awareness of the notices and the impugned order, citing Section 226 of the Constitution of India. Petitioner's arguments: The petitioner contended that they were unaware of the notices and the impugned order as they were posted on the GST common portal and the proprietor was hospitalized. They argued that the respondent unilaterally recovered amounts from their Electronic Credit Ledger, exceeding their powers which were limited to blocking the account. Respondent's arguments: The respondent argued that the writ petition was without merit and liable to be dismissed, citing the Supreme Court decision in Assistant Commissioner (CT) LTU, Kakinada and others vs. Glaxo Smith Kline Consumer Health Care Limited, as the writ petition was filed after a considerable delay from the date of the assessment order. They also submitted that the appeal remedy was unavailable as the limitation period under Section 107 of the GST Act, 2017, had expired, referencing the Supreme Court decision in Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur and others.